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The developing in free time employee's dilemma

I would like to find out your opinion on the following situation. I am working full time in a medium sized software company. Being a lead system architect and having designed and developed the key components and core system of the company's product-line, I am very appreciated. While working at this company I've started for fun a project of my own which after some time I have released as a shareware product. It is a small development tool which brings me a few additional bucks although nothing worth mentioning or giving the possibility to leave the job and start a company. At the time the product started it had nothing to do with the development line of the company, but after a while this has changed, and now the company is in search for exactly this kind of tool and it happens that mine is the only one really worth taking in consideration. I had never mentioned my extracurricular activity to my employer and now I am facing a dilemma. Although the commercial license of the product can be freely bought online the company will be also needing the source code. This is where the dilemma starts. Should I disclose to my employer my relation to this product ? But then, how will he react ? On the other hand the product could really help the company and could also give me an additional image boost if the reaction is positive. But then I will have to discuss the selling of the source code to the company ? Perhaps the source code will be seen as their rightful property ?

What would you do in my place ? How would you react as an employer ? Perhaps continuing keeping this a secret is the best decision ?

A developer who likes coding day and night
Thursday, May 6, 2004

Re-read everything you signed when joining the company. Depending on where you live, they may own it.

Thursday, May 6, 2004

I GUARANTEE you that what will happen is they will threated to sue you if you don't give them the code. if you don't they will sue you and drag it out until you give in or are broke. In the end, they will have youir code and an injuction against you for developming in that field at all. They will also fire you with cause as soon as they can.

I am willing to wager a modest sum that this will happen if you tell them about your program. I have seen this happen several times and it always goes down this way.

Remember, that your program will help them and you are a innovative self-starter is not important. All that is important is their power over you.

Dave Winchester
Thursday, May 6, 2004

That said, I think you should offer to license your code to them for a substantial sum. And when they start in they are going to sue you etc and be assholes after all you did for them, after all your hours staying late without overtime, be outraged and leave the company in a huff.

Do not forget to encrypt all your source code files at work before doing so.

And no matter what they say, no matter how they beg and plead, do NOT return to them or give them the passwords. Disconnect your phone. Move out of town. If they do get you on the phone tell them that you don't do business with dirty lying thieves that steal stuff that doesn't belong to them.

Above all - you MUST be prepared for them to get nasty to you. Expect it. This will give you a big advantage since their scheme to catch you off balance by accusing you of thing will not work like it does with other weakling developers.

Dave Winchester
Thursday, May 6, 2004

You put yourself between a rock and a hard place. If you read your employment agreement, chances are very high that the company can claim ownership of ALL code you write whether it's on your time or not. Because you are an exempt professional employee they can legally claim that the hours during which you did the development are irrelevant. The only important fact is that they pay you to write code. You wrote code. It belongs to them.

Now, had you cleared this first with letters or emails to your management and they acknowledged it was separate from your employment duties, that might be different. You would have a legal leg to stand on. But you didn't and you've been selling this surrepticiously.

The only thing you can do is discuss it with your boss and hope he won't just say "give it here". Then again, you could lie and claim that this code was written by your son or brother or somebody else and they have to buy it off of him?

Thursday, May 6, 2004

Set up a DBA (doing business as) with a bank acount and a PO box.  Handle the entire transaction with that fake "company" and not any names.  How many people ask "who wrote this software?" when they buy a product?  I've never heard of anyone caring about the authors.

You can tell them about the product, but just take your name out of all the materials (website, comments, documentation, transaction, etc.)

Clay Whipkey
Thursday, May 6, 2004

I think the best solution (assuming they don't own the code) is to inform them of the conflict of interest.  Let them know that you wrote the software, etc.  At which point, you have a few options probably.  1) charge them for the product, and risk them suing you or firing you or having to quit in order to charge them for it.  2) offer to license the source code to them free of charge, while not permitting them to redistribute the source or any derivatives of the program/source, hopefully pacifying their concerns and needs while staying employed yourself.  Just make sure that you in no way shape or form ever work with the source code of the product on company time or offer to serve as a consultant.  You must continue to avoid conflict of interest even after licensing it to them, or they may as well have ownership as future work would belong to them.

Thursday, May 6, 2004

tell them you know the guy who wrote the software, and ask your friend to play that guy, and sell the source for good money.

Thursday, May 6, 2004

Simplest answer: Make every effort to pretend your externally-developed program doesn't exist.  This means:

-use someone else's similar tool, despite how bad you think the competition is,

-take your tool's web site offline (temporarily?), and/or fail to respond to emails sent to you from your company,

-that about covers it as far as I'm concerned.

This way, your "small income per month" shareware tool doesn't interfere with your "large income per month" job.  Which is more important, after all?

Thursday, May 6, 2004

Some potentially-relevant things I'd consider that weren't made clear in the OP:

- Do you like working where you do?  Do you have alternatives?
- What's your history at your company?  How have they treated you in the past?  Do you feel any loyalty to, for example, your team or your immediate supervisor?
- If this situation hadn't come up, would you see yourself staying there?

And, most importantly:
- What do you want out of the situation?  Money?  Recognition/prestige at your company?  A start at a viable (i.e. income-producing) shareware business?

The other suggestions (esp. re-reading any & all agreements you signed to work there) are good, but these are the sorts of things I'd ask you if we were discussing this over a beer...

- former car owner in Queens
Thursday, May 6, 2004

God, whatever you do, *don't lie* about your relationship to the product and let your employer buy it, especially if you're involved in the buying process.  You're opening yourself up to a jail sentence for fraud if you do, and hell, the potential upside simply isn't worth that downside, even if the product was worth more than just a few bucks to you.

I'll presume you've got a contract that states that all code you write belongs to the company - if not, you're in the clear and can do what you like.

Given that you're appreciated within the company, you should be able to do okay out of this. 

Go to your boss.  Tell him that you need to recuse yourself from the buying decision because you've written one of the products under consideration. 

Tell him that should the buying process choose your product, that you realise the conflict of interest, and that you would be prepared to sign ownership of the software over to the company, but think that you should get a bonus as a reward for having saved the company however much it was prepared to spend.

*Don't* mention your contract.  You've just given your boss a decent win situation for a friendly negotiation, and hopefully he'll take it.  If he mentions your contract, you've left friendly negotiations and have entered hostile negotiations, which you *cannot* win.  You need to get the negotiations friendly again - if you appear to back down, but explain how much work you've put into the product and that you think it would be fair to reward you for that, you've got a decent chance of still making it out of there with some kind of reward.

This way you've got a chance of coming out of this with some money, an improved reputation, and perhaps a bit of a licence to go away and do your own R&D now and again.  You may come out of it gaining nothing and losing your code.  But at least you won't lose your job or gain a conviction.....

Thursday, May 6, 2004

Set up a company and assign ownership to the company. If and when your employer wants to use the tool, let your company sell it to them. Keep your name and involvement out of it.

Get your brother or a friend to do the negotiation.

Senior managements do this sort of thing all the time.

Thursday, May 6, 2004

Thank you for you comments. It seems that contract wise I am in the clear. There is no any clause in the contract that would prevent me doing some development in my own time (I do not live in the US). What worries me the most is how the fact that I have developed something non-trivial in my free time will affect my relationship with my boss. Perhaps he will feel that he didn't give me enough responsabilities (working overtime at this company is something considered normal). While working at this company I've stayed away from having a more personal relationship with my boss, lately things are developing in the direction where I will need his help (and he is actually willing to help me). So at this point a would not like to risk this relationship by doing something stupid and there is a risk that, although legally there is nothing he can do, on the personal plan he'll feel offended. On the other hand, lying to him by not disclosing my relation to the product or lying in any other way, I am risking perhaps even more as there is a possibility that he will eventually find out about this from some other source.

Now to answer some question,

> - Do you like working where you do?  Do you have alternatives?

Yes, I like working here and I have actually invested much time in this job. Perhaps there are other alternatives but I doubt that I could find something considerably better at this point.

> - What's your history at your company?  How have they treated you in the past?
> Do you feel any loyalty to, for example, your team or your immediate supervisor?

I've tried to give my best to the company and at this point one could say that without me they would not succeed with the software solution their are developing and which is very very important to the company (it was actually recognized by other employees). On the other hand as I've said, I've tried to not personally attach myself to this company although it seems that it is going to change.

> - If this situation hadn't come up, would you see yourself staying there?


> - What do you want out of the situation?  Money?  Recognition/prestige at your company?
> A start at a viable (i.e. income-producing) shareware business?

At this point it would not hurt to have even more recognition and prestige. Regarding the shareware business, although being an interesting experience I don't see it becoming something successfull, at least not with this product although I would like to continue developing it.

A developer who likes coding day and night
Thursday, May 6, 2004

When did you join the company? If it's not that long time ago then you wrote it before you joined the company.

Peter Monsson
Thursday, May 6, 2004

The software is written 100% while being employed at this company.

A developer who likes coding day and night
Thursday, May 6, 2004

"The software is written 100% while being employed at this company"

are you so sure about that? hmmm? think man, think

Thursday, May 6, 2004

I like the idea about setting a company (or PO box, etc.) just for selling the software from now. As already said, remove all the references to you from the source code, remove your soft from your web, just let it be in the company web, etc.

Watch out with Google. Test if a "product name" search links to your name. If that happens, I bet for changing the name of the software too.

I do not understand why you have to tell your boss. Does he tell you what he's doing in his free time?

The only moral question is if you are pushing in your bussiness to buy that software or if it's a decition you have nothing to do with it. If they ask you, well, be cold minded and fair, write something professional and based on facts, just like you'd do evaluating other software. Although I know some people would have it clear: suggest them that software. It's up to you.

If finally they buy the software with source code:
- two good news for you: 1) the money 2) nobody knows it, but you are going to need very short time to get to use it (understanding, etc.)

- a not so good new for the software: what trend are you going to follow to improve the software? is it going to dead (no more versions)? or what if your ideas for the next version are too close to the ideas developed on it at work? :/

Thursday, May 6, 2004

I recommend being open to your boss about the situation.

Many developers write code in their spare time.

Best case scenario would be that you reach some sort of agreement where you can continue marketing the tool and your company can start to use it. You should get a written contract clarifying what you are allowed to do with the software. You'll probably make some modifications to your tool to suit the company.

Also, others at your company may get jealous. Why do you get to sell your tools, but Jim who wrote that reporting framework last week can't sell that?

I think the worst that can happen is that your company makes you turn over the software and demands that you stop marketing it.

Thursday, May 6, 2004

You should talk to the boss and explain the situation. Walk in prepared to give the product and a copy of the source to the company with a written agreement that you hold both the rights to the code and it's (continued) sales outside the company.

The company wins by getting a product they want for free (as well as free on-site tech support) and you (may) look the hero as well as wiggle out of a tight spot.

You do loose the income which you would have seen had you sold it to the company but do you really want to be an employee as well as a product supplier to the same company - what a mess that would be. Just having them use your product is going to get messy enough.

I should say that I'm certainly not used to the situations explained earlier in this conversation, where I work anything you write outside of your defined work is yours. I just don't get the "I pay you to code ergo everything you write is mine." scenario, at all.


Perpetual Newbie II
Thursday, May 6, 2004

"I do not live in the US."

Sheesh! Wish you'd told us this up front. My comments apply to US busines culture *only*.

Please folks, when asking questions that deal with legal issies and/or culture, DO state where you are located it *really* matters.

Intellectual property rights much more favor the individual outside the US -- in most modern countries the company can NOT own what you create on your own time. The US is the weri exception, due to the unique power of corporations and their ability to promote their own interests over those of the common good and the individual.

Dave Winchester
Thursday, May 6, 2004

"he worst that can happen is that your company makes you turn over the software and demands that you stop marketing it. "

The worst that can happen is you go to prison for embezzlement. Company ets a judgement that they own the software. You have been selling the software and pocketing the money. That's theft. You go to prison.

Dave Winchester
Thursday, May 6, 2004


"where I work anything you write outside of your defined work is yours"

I would guess you work outside the US.

In the US, almost ALL employment contracts specify that you they own you and everything you do in your free time AND everything you do for seven years after leaving the company which is 'related to the business of the company', which typically will be determined to be 'software'. In addition to this, laws support this nonsense, such as that developers are NOT entitiled to any sort of overtime and that employees can work you for 96 or 112 hrs a week and only pay for the first 40.

Dave Winchester
Thursday, May 6, 2004

Dave W, my guess is "almost ALL" is an overstatement.  If you work for a major consulting company, odds are about 50-50 that you own the work -- as long as you can prove you developed the work on your own equipment and on your own time.  CGE&Y (major enough company, I guess) is one in this camp.  CSC, OTOH, is the opposite.  They own it.

Two major defense contractors with whom I'm familiar (Fortune 200) also have arrangements similar to CGE&Y.  You own it - if you did it with your own systems and on your own time.

This is, of course, provided that it does not compete or hamper the companies' business.

dir at badblue com
Thursday, May 6, 2004

It might be something to take a quick survey on. I've had around a dozen development jobs and on every single one there is stuff about this in the proposed contract. Sometimes I can get some of it tossed out during negotiations, sometimes not. There's been a couple times where I didn't accept the offer because of the contract.

Dave Winchester
Thursday, May 6, 2004

Dave,  I (PNII) am Canadian.

The US laws on this suck - BIG Time - my condolences!


Perpetual Newbie II
Thursday, May 6, 2004

I admit the seven years is an over statement - 1 to 3 years is typical for claims on stuff they own AFTER you quit, though one place did have a clause that anything you did for the rest of your life 'related' to their business would be their property - sort of rules out ever working in IT again. Assuming such a restriction would be thrown out in most states, but not necessarily, and besides it never bodes well to your time at the company should you accept.

Dave Winchester
Thursday, May 6, 2004

> The US laws

Sorry, The corporate policy in the US ...

Perpetual Newbie II
Thursday, May 6, 2004

Laws too, or rather the lack thereof. In many modern countries, they have laws to protect the rights of the worker - such as mandatory overtime pay and requirements that benefits must be provided. Common law is different regarding what you do with your free time. And many of these strange contract provisions would not be upheld anywhere outside the us.

Dave Winchester
Thursday, May 6, 2004

Mr Developer, regarding your comment that you're wary about distrubing your nice relationship with your boss - I think the fact is that things change. You move on. He moves on.

You've got something your employer needs. They have to buy it from you. They might not like that. Stiff.

You have to grow up.

Friday, May 7, 2004

There is a lot of reactionary drivel in this thread. It seems pretty simple to me.

* If your contract allows you to do work in your own time for your own benefit then you own the software. The only potential issues are if you ever worked on it during work time and/or if you started working on this knowing that your company had or would have an interest in that area. It sounds like that is not the case and even if it was, its a real stretch to argue that.

* As owner of the software, you have every right to sell it to your company. If your company wanted to buy your car or film rights to a book that you wrote, they would have to pay. As long as they can't claim ownership, you are OK. They may negotiate hard though.

* I would suggest that your most economically fruitful reward here is to trade the source for a promotion and/or consolidated payrise. That way your employer (or subsequent employers) will be paying a nice, invisible long term licence fee. Alternatively, if your company pays overtime then tot up the hours that your have worked on this and base the price on that. If you do that add a premium don't give them a discount - you still own the software and have used your time and initiative to do the work.

* I would also suggest that you are free and frank about your ownership and conflict of interest. You want them to pay for something you own. Deceit or slight of hand will give them decisive control of any negotiation. You haven't done anything wrong.

* Under no circumstances simply cave in and hand the thing over. That sets a dangerous precedent.

* Most important of all - for me - just because you did this in your free time does NOT mean that you should be spending that time working for your employer. Your employer doesn't say 'hey, if you are just going home to watch TV and sleep, you can stay here and be my slave'. What you do in your time is your own business.

Beware of the other voices in this thread. You know your employer best and it sounds like your issue is to do with the ethics of writing software at home and selling it to your employer. If your contract allows that, then that is perfectly fine. In fact, you are effectively writing and selling software to your employer as part of your employment anyway. This is merely an extension. They may try to tell you otherwise but just hold your ground.

Friday, May 7, 2004

I would say be open about this. Certainly if you're not contractually obligated to give them ownership, and it sounds like you're not, then you have nothing to lose legally (what are the unfair or constructive dismissal laws like in your area?)

On the other hand, if you do attempt to cover your involvement, if/when (and most likely when) you do get found out, now they have evidence of fraud, with malice of forethought. That is NOT something you need.

I would second the other people around here who say simply negotiate with them. It's a product that you happen to own, use it as a negotiating point, and a proof of your worth to the company. Try and make yourself look like the good guy. Make sure they realise that you could just walk off with it and leave them in the lurch, but that you'd rather be friendly about it, and everyone gets treated well. I doubt your boss WANTS to fire you, he's had no reason to, and your comments about him being willing to help you suggest that he's at least relatively friendly and co-operative.

Andrew Cherry
Friday, May 7, 2004

Listen to WoodenTongue.

Simon Lucy
Friday, May 7, 2004

although there have been some good observations here,  talk to a lawyer to get real advice.  This situation is clearly sticky, so it it well worth the cost of speaking with a professional.

Friday, May 7, 2004

If the company doesn't know you wrote it then here's what you do:  If they want to buy/license your source say no way or ask for an extremely high number.  They pay, great, as long as you can keep your name out of it.  If they don't pay then you (as an employee) say 'Hey that software doesn't look too complicated...I can write it in a week.'  They let you do it, so you are all set - you've increased your value to the company and you can still run your little side business.

Friday, May 7, 2004

If the company doesn't own it via contract, you still can run into another issue.  Selling the company something you wrote is a (potential) conflict of interest, and if you don't recuse yourself from the recommendation or selection process, they will have grounds for dismissal, assuming company policy requires you to recuse yourself or notify your manager that a conflict of interest exists.

Note by the way that you don't have to reveal that you *wrote* the software, if you have determined it legally belongs to you.  Frankly, that's none of their business, and it would be unwise of you to reveal it because of the political/relationship effects you mentioned.

The only material matter is that you would profit via their selection and purchase or source licensing of the software.  You need only state that you have "an ownership interest" in the company that sells the software, and that there is a potential conflict of interest if you are involved in the selection process, because you could profit by it being selected.

At that point, you are free and clear, sitting nicely on the moral high ground, looking like a good guy for bringing this to their attention.  It's even possible they will want to buy it anyway.

Of course, you then run the risk of them asking for more detail about the ownership interest, but that is only likely if they decide to pursue it because the product is so good or they want to reward your honesty.  Alternatively, they may wish to use your "influence" to get a better deal with the other "owners".

However, in this case, you can stand once again on the moral high ground by pointing out that providing inside information about the other company or participating in both sides of the negotiation would again be a conflict of interest, and point out that you would rather have the deal fall through and result in no money to you, than to have even the appearance of impropriety besmirching your unsullied reputation for integrity and fair dealing with all sides of an issue.  :)

Phillip J. Eby
Friday, May 7, 2004

DON'T "talk to a lawyer." He will tell you your employer owns it and that, for the sake of preserving your comfortable job, you should just hand over the product.

He will do this because it's the simplest solution for him and because he knows you can't afford to pay him to take it to court if that becomes necessary. So it's easiest to avoid and disputes.

In fact, he might even approach the employer and offer his services to ensure they own all employees' work in the future. (I've seen this done.)

Friday, May 7, 2004

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